How to Attempt IBS Paper 2026 | CA Final IBS Exam Strategy

The CA Final Integrated Business Solutions (IBS) paper requires strategic planning and effective time management to complete four out of five case studies within four hours. The 15-minute reading time should be used to select the case to omit by reviewing descriptive questions.

A case-by-case approach, answering descriptive questions first, then MCQs, ensures full completion. Focus on clarity, use keywords instead of lengthy copying, and apply core concepts like Director Disqualification, EVA, and Impairment accurately. This guide on how to attempt IBS Paper 2026 maximizes efficiency and improves the chances of scoring well.

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1. CA Final IBS Examination Strategy

The CA IBS exam is a 4-hour paper with an additional 15-minute reading time. Candidates must attempt any four out of five provided case studies. Case Study 1 is not mandatory.

1.1. Utilizing the 15-Minute Reading Time

The primary objective of the reading time is to select which case study to leave.

1. Go directly to the descriptive questions at the end of each case study. Do not read the full case studies at this stage.

2. Identify the subject (e.g., Law, AFM) and specific topic for each descriptive question, making brief notes.

3. Based on these questions, decide which four cases to attempt and which one to omit. Prioritize leaving a case study that appears excessively lengthy or contains overly complex practical questions, as the IBS paper is notoriously long. Theory-based questions are often quicker to answer.

Note: The IBS paper is a single, integrated booklet. During reading time, focus solely on descriptive questions for selection.

1.2. Strategy for the 4-Hour Writing Time

A structured approach is essential for completing the paper. It is recommended to handle each chosen case study completely (descriptive and MCQ) before moving to the next.

Recommended Workflow for Each Case Study:

1. Start with the Descriptive Questions: Read the descriptive question first. Then, navigate to the case study and read only the paragraph(s) relevant to that specific question for context.

2. Answering the Question:

• If you know the answer confidently, write it immediately without searching. Wasting time searching for known answers is a major reason for incomplete papers.

• If you do not know the answer, you must search. Start with primary study material; if not found, refer to the official ICAI Study Material.

3. Solve the MCQs: After completing all descriptive questions for a case study, solve its corresponding MCQs.

4. Time Allocation: Target the completion of one full case study per hour. If falling behind, move to the next one to ensure all four are attempted.

Comparative Structure: Recommended vs. Inefficient Approach

2. CA Final IBS Important Examination Tips

1. Paper Length: The IBS paper is consistently lengthy, and most students struggle to complete it. Your primary focus should be on 100% paper completion. Avoid spending time on elaborate presentations like drawing lines or tables. Ensure your writing and calculated amounts are clear and legible.

2. Mandatory MCQs: Answer all MCQs for the four chosen case studies. These do not require reasoning and involve filling OMR circles.

3. Time Pressure Strategy: If time is short, prioritize writing the core provision or concept for remaining descriptive questions. This typically carries about 50% of the marks and is simpler than detailed analysis and conclusion.

4. Answering Sequence: As soon as you find an answer, write it down immediately. Do not wait to find all answers before starting to write, as this risks leaving parts unattempted.

5. Copy-Pasting Content: Do not copy-paste entire paragraphs verbatim. This is extremely time-consuming. Focus on copying keywords. A good strategy is to ensure your initial and final lines match the source, summarizing the body in your own words.

6. Penalty for Answering Extra Questions: You must attempt questions from only four case studies. DO NOT attempt MCQs for all five cases. If you answer questions from all five cases, ICAI will mark the best four but will impose a five-mark penalty.

7. Repeated Case Studies: The probability of a case study being repeated from a past CA exam is extremely low. Do not waste time intentionally searching for repeated questions if you are well-prepared.

3. CA Final IBS Case Study Solution Examples

This section demonstrates the practical application of the exam strategy using examples from a past paper.

3.1. Question 1.6: Director Disqualification (Company Law)

Scenario: Radhika is a director in Life Education Ltd. and PQR Ltd. PQR Ltd. failed to file financial statements for FY 2021, 2022, and 2023. This default was discovered in March 2024. PQR Ltd. rectified the default on May 8, 2024. Radhika was reappointed as a director in Life Education Ltd. on September 15, 2024.

Question:

1. When is Radhika disqualified?

2. Is her reappointment valid?

3. Will her DIN be deactivated?

Analysis (Company Law - Section 164(2)):

• Provision: A director of a company that fails to file financial statements or annual returns for any continuous period of three financial years becomes ineligible for reappointment in that company or appointment in any other company for five years from the date of default.

• Application:

• Date of Default: PQR Ltd.'s default for FY 2021, 2022, and 2023 triggered disqualification around October 30, 2023 (assuming a Sep 30 AGM for FY 22-23).

• Disqualification: Radhika became disqualified on October 30, 2023, for five years.

• Validity of Reappointment: Her reappointment in Life Education Ltd. on September 15, 2024, occurred while disqualified, making the appointment invalid. She was required to vacate office on October 30, 2023.

• DIN Status: Disqualification under Section 164(2) is temporary; thus, her DIN will not be deactivated.

3.2. Question 1.7: Evaluating Management Efficiency (AFM)

Scenario: Use provided summary financial statements, pre-tax cost of debt (15%), cost of equity (9%), and a 17.16% effective tax rate (due to Section 115BAB) to demonstrate management efficiency. A non-cash bad debt provision of ₹50 lakhs is in admin expenses.

Question: How would you demonstrate management efficiency?

Analysis (Advanced Financial Management - Economic Value Added (EVA)):

• Concept: EVA measures the value created by management above the cost of capital employed. A positive EVA indicates efficient performance.

• Formula: EVA = NOPAT - (Invested Capital × WACC)

• Calculations:

1. NOPAT (Net Operating Profit After Tax): Start with EBIT, add back non-cash items (e.g., ₹50 lakh bad debt provision), and apply the 17.16% effective tax rate. Example: Adjusted NOPAT = ₹650 lakhs.

2. Invested Capital: Total Assets - Current Liabilities, adjusted for non-cash items. Example: Invested Capital = ₹2150 lakhs.

3. WACC (Weighted Average Cost of Capital): Calculate after-tax cost of debt. Use weights of equity and debt from the balance sheet (e.g., Equity: 1800, Debt: 300). Example: WACC = 9.49%.

4. EVA Calculation: Capital Charge = Invested Capital × WACC = ₹2150 lakhs × 9.49% = ₹204.04 lakhs.
   EVA = NOPAT - Capital Charge = ₹650 lakhs - ₹204.04 lakhs = ₹445.96 lakhs.

• Conclusion: A positive EVA of ₹445.96 lakhs indicates that management's strategic decisions have generated returns significantly exceeding the cost of capital, demonstrating high efficiency and value creation for shareholders.

3.3. Question 1.8: Impairment of a Cash-Generating Unit (Ind AS 36)

Scenario: Life Education Ltd. carries "Wing W," a Cash-Generating Unit (CGU) with allocated goodwill of ₹400 lakhs, at ₹1200 lakhs as of March 31, 2025.

Question: Is this carrying amount correct per accounting standards?

Analysis (Ind AS 36: Impairment of Assets):

1. Topic Identification: The presence of a CGU, goodwill, and recoverable amount points to Ind AS 36: Impairment of Assets.

2. CGU's Carrying Amount Calculation (as of March 31, 2025):

• Asset (Wing W): Acquired at ₹2000 lakhs (April 1, 2017), useful life 20 years. Annual Depreciation = ₹100 lakhs. For 8 years, Accumulated Depreciation = ₹800 lakhs.

• Carrying Amount of Wing W = ₹2000 lakhs - ₹800 lakhs = ₹1200 lakhs.

• Goodwill: Allocated at ₹400 lakhs (not amortized).

• Total Carrying Amount of CGU = ₹1200 lakhs (Wing W) + ₹400 lakhs (Goodwill) = ₹1600 lakhs.

3. Impairment Test:

• Principle: An impairment loss is recognized if the carrying amount of a CGU exceeds its recoverable amount.

• Comparison: Total CGU Carrying Amount: ₹1600 lakhs. Recoverable Amount (given): ₹1100 lakhs.

• Impairment Loss = ₹1600 lakhs - ₹1100 lakhs = ₹500 lakhs.

4. Allocation of Impairment Loss (Ind AS 36):

• First, allocate to reduce goodwill to zero.

• Then, allocate the remaining loss to other assets on a pro-rata basis.

• Application:

• Total Loss: ₹500 lakhs.

• Allocate ₹400 lakhs to Goodwill (reduces goodwill to ₹0).

• Remaining Loss: ₹500 lakhs - ₹400 lakhs = ₹100 lakhs.

• Allocate ₹100 lakhs to Wing W.

5. Final Conclusion:

• Revised Carrying Amount of Goodwill: ₹0.

• Revised Carrying Amount of Wing W: ₹1200 lakhs - ₹100 lakhs = ₹1100 lakhs.

• Therefore, the statement that Life Education Ltd. should carry Wing W at ₹1200 lakhs is incorrect. The correct carrying amount after impairment is ₹1100 lakhs.

4. Multiple Choice Questions (MCQs) Analysis

The MCQs analysis for CA Final IBS Paper is presented in this section to help aspirants:

4.1. MCQ 1.1: Business Model Analysis (SCPM)

Scenario: Life Education Ltd. offers free online services alongside paid, one-on-one expert guidance.

Analysis: This structure is characteristic of the Freemium Business Model, where a core product is offered free to acquire users, and premium features/services are charged.

Conclusion: The business model is Freemium.

4.2. MCQ 1.2: Subsequent Events & Audit Reporting (Audit - SA 560)

Scenario: An audit report was signed on May 4th. Amended financial statements, incorporating a significant government incentive, were approved on June 1st. A fresh audit report is requested.

Analysis (SA 560, Subsequent Events): When financial statements are amended after the original audit report date, the auditor must:

1. Issue a new audit report dated no earlier than the date of approval of the amended financial statements (on or after June 1st).

2. Include an Emphasis of Matter (EOM) or Other Matter (OM) paragraph explaining the revision and referring to the note describing the subsequent event.
   Conclusion: Issue a new report dated on or after June 1st, with an EOM/OM paragraph.

4.3. MCQ 1.3: Conditions for Special Audit (GST)

Scenario: The GST department initiated a special audit because the company paid incorrect GST due to a wrong GST rate.

Analysis (Section 66 of the CGST Act): A special audit can be directed only if the officer opines that:

1. The value of supplies has not been correctly declared; OR

2. The input tax credit (ITC) availed is not within normal limits.
   Using a "wrong GST rate" is an issue of classification of supply, not incorrect value declaration or irregular ITC.
   Conclusion: A special audit cannot be carried out under these circumstances.

4.4. MCQ 1.4: TDS on ESOPs from an Eligible Startup (Direct Tax)

Scenario: Life Education Ltd., an eligible startup, allotted ESOPs to an employee.

Analysis (Income Tax Act): For ESOPs from an eligible startup, TDS on the perquisite value can be deferred. Tax liability is postponed, not waived.

TDS Deduction: Must be within 14 days of the earliest of:

1. Expiry of a specified period from the assessment year relevant to allotment.

2. Employee selling shares.

3. Employee ceasing employment.
   Conclusion: The company is not required to withhold tax at the time of allotment but must do so upon certain future events or a specified timeline.

4.5. MCQ 1.5: Loss on Downstream Transaction to a Joint Venture (FR)

Scenario: Life Education Ltd. (venturer) transferred equipment to its joint venture. Carrying Value: ₹9 crores, Transfer Price (Market Value): ₹8 crores. This is a downstream transaction.

Analysis (Accounting Treatment): When a venturer sells an asset to its joint venture, any loss on the transaction must be recognized in full, immediately. The loss signifies a genuine decline in the asset's value.

Calculation: Loss on transfer = ₹9 crores - ₹8 crores = ₹1 crore.

Conclusion: Life Education Ltd. must recognize an immediate loss of ₹1 crore.